McDonald's can sue ousted CEO over alleged lies about affairs -judge

McDonald’s can sue fired CEO to try and recoup his $40MILLION severance package over his ‘lies about affairs’, says judge

  • Stephen Easterbrook, 53, was ousted from McDonald’s in November last year after he admitted to exchanging videos and text messages with an employee 
  • The British CEO was allowed to keep about $40m in stock-based benefits and 26 weeks of pay as part of his board-approved ‘without cause’ termination 
  • McDonald’s is now suing Easterbrook for allegedly lying about three other employee relationships in the year prior to his termination 
  • He had inappropriate relationships with five women who worked for company 
  • Only one of the women has been identified; PR executive Denise Paleothodoros 
  • In a lawsuit, McDonald’s accused Easterbrook of deleting evidence of those relationships
  • The lawsuit claims Easterbrook tried to cover up the relationships to prevent investigators from learning about them prior to his firing 
  • McDonald’s suit claims he deleted dozens of nude photos of the employees
  • The images had been sent using his work email and his company phone, suit says
  • The company is now attempting to block Easterbrook from exercising his stock options and is seeking compensatory damages

A Delaware judge on Tuesday rejected former McDonald’s Corp Chief Executive Steve Easterbrook’s bid to dismiss a lawsuit by the fast-food chain seeking to recoup millions of dollars in severance pay because he allegedly covered up improper sexual relationships with employees.

McDonald’s knew that he had engaged in one, non-physical consensual relationship with an employee when the company agreed to a severance package estimated at $41.8 million in November 2019, both sides agreed.

The former CEO argued in his motion to dismiss that the restaurant company had evidence of his other sexual relationships with employees on its computer system so should have been aware of them. 

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A Delaware judge on Tuesday rejected former McDonald’s Corp Chief Executive Steve Easterbrook’s bid to dismiss a lawsuit by the fast-food chain 

McDonald’s knew that he had engaged in one, non-physical consensual relationship with an employee when the company agreed to a severance package estimated at $41.8 million in November 2019, both sides agreed

Vice Chancellor Joseph Slights of the Court of Chancery in Delaware, however, said McDonald’s was justified in relying on Easterbrook’s statements that he had only a single inappropriate relationship when the Chicago-based company ousted him.

A lawyer for Easterbrook did not immediately respond to requests for comment.

McDonald’s said it looked forward to proving Easterbrook’s misconduct.

‘He violated the company’s policies, disrespected its values and abused the trust of his co-workers, the board, our franchisees and our shareholders,’ it said in a statement.

After he was fired, it emerged that Easterbrook had previously escaped censure for another alleged office romance. It came to light that Easterbrook had reportedly dated Denise Paleothodoros, 46, when she was assigned to the McDonald’s account by her PR firm 

McDonald’s sued Easterbrook in August, nine months after reaching the severance package, claiming he never gave directors a complete picture of his relationships with employees

McDonald’s sued Easterbrook in August, nine months after reaching the severance package, claiming he never gave directors a complete picture of his relationships with employees.

It said that after Easterbrook’s ouster, an anonymous tip led to the discovery of dozens of nude or sexually explicit photos of women, including three employees, that Easterbrook sent to his personal email account from his company account.

McDonald’s said Easterbrook deleted the emails shortly before his ouster, but they remained on a company server.

‘This active concealment makes it at least reasonably conceivable the company had no way of knowing the full extent of Easterbrook’s misconduct,’ Slights wrote.

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